Empowering Equity: Women Transforming South Asia’s Banking Sector

The IFC report on women's advancement in banking in South Asia highlights the need for greater gender diversity in the industry. Despite women's strong aspirations, significant barriers such as inequitable hiring practices, lack of fair evaluations, inadequate professional development, non-conducive work environments, and sociocultural constraints hinder their progression. The report calls for committed leadership, safe and equitable workplaces, and ecosystem engagement to support women's advancement. By addressing these challenges, the banking sector can enhance its competitiveness and contribute to economic growth.

In South Asia, the journey of women striving for leadership roles in the banking sector is filled with obstacles. According to the recent report by the International Finance Corporation (IFC), "Women’s Advancement in Banking in Emerging South Asian Countries," the representation of women in the banking industry of Bangladesh, Nepal, and Sri Lanka remains significantly below global averages. Women constitute only 30% of the workforce in these countries, compared to a global average of 52%.

Nepal stands out with women making up 42% of the banking workforce, moving closer to gender parity. Sri Lanka follows with 38%, while Bangladesh trails at a mere 18%. Despite their strong aspirations to ascend the corporate ladder, women face a sharp decline in representation from entry-level to senior management positions.

Unequal Playing Field

The IFC report identifies several barriers that hinder women’s advancement in the banking sector. These include inequitable hiring practices, biased evaluations, inadequate professional development opportunities, non-conducive work environments, and sociocultural constraints.

Inequitable Hiring: Women often face unconscious biases during recruitment, which affects their entry into the industry. In Bangladesh, for example, fewer women pursue postgraduate studies required for many banking roles, limiting their opportunities from the outset.

Biased Evaluations: Performance evaluations in many banks are subjective and often biased against women. Feedback for women tends to be vague and less constructive, affecting their chances of progression.

Inadequate Professional Development: Women receive less access to mentoring, coaching, and critical projects compared to their male counterparts. This lack of support hinders their ability to develop the necessary skills and showcase their leadership potential.

Non-Conducive Work Environments: Women frequently encounter microaggressions, bullying, and a lack of respect from colleagues. These challenges create a hostile work environment, making it difficult for women to thrive.

Sociocultural Constraints: Prevailing social norms place a disproportionate burden of unpaid care work on women. This double burden restricts their ability to balance professional and personal responsibilities effectively.

Legal Frameworks and Policy Gaps

The report also sheds light on the varying legal and policy frameworks across the three countries. Nepal has the most robust legal framework, offering parental leave for both mothers and fathers and legislation against workplace discrimination and harassment. Bangladesh provides extensive maternity leave but lacks paternity leave and protection against gender-based discrimination. Sri Lanka’s legal provisions fall short of international benchmarks, particularly in ensuring gender parity in leadership positions.

These legal disparities reflect the broader trend of women’s participation in the banking sector, with Nepal leading, followed by Sri Lanka and Bangladesh.

Pathways to Progress

To address these challenges, the IFC report provides several recommendations aimed at fostering a more inclusive and supportive environment for women in banking. These include:

Leadership Commitment: Banks should set ambitious organizational commitments and hold themselves accountable for achieving gender diversity targets. Senior leaders must champion these initiatives and drive cultural change within their organizations.

Safe and Equitable Workplaces: Practical solutions, such as mentorship programs, fair evaluations, and flexible work arrangements, should be implemented to support women. Creating a safe and respectful work environment is crucial for women to thrive.

Ecosystem Engagement: Regulators, industry bodies, and investors should promote accountability and support banks in addressing systemic challenges. This includes setting industry-level targets for women’s representation and ensuring compliance through robust monitoring mechanisms.

Road Ahead

The findings from the IFC report underscore the urgent need for targeted efforts to advance women’s leadership in South Asia’s banking sector. By addressing the identified barriers and implementing the recommended solutions, the banking industry can unlock significant business and social benefits. Greater gender diversity will not only enhance competitiveness and innovation but also contribute to overall economic prosperity.

As global data shows, banks with more women in senior positions demonstrate better risk management, higher profits, and improved talent retention. For South Asia, fostering an inclusive and diverse banking sector is key to future resilience and growth.